REGIONAL TARGET MARKETS


WHOLESALERS OF
NON-DURABLE GOODS

By James Surrago


Wholesalers of non-durable goods in the United States number 191,000, employ slightly more than 3 million people, and generate $3.7 billion in written premium--2.79% of countrywide commercial lines premium.

In the last five years premiums in this market grew by .08%, employment grew 5.2%, and the number of establishments grew 5.5%. The loss experience for the group as a whole generally appears to be reasonable, with loss ratios for the most part in the high 50s to low 60s. Only two of the 33 classifications in this market segment report poor loss experience--drugs, proprietaries and sundries; and wholesale administration and auxiliary services (SIC Codes 5120 and 519\).

Of the 33 wholesalers of non-durable goods categories, seven experienced both premium and employment growth during the most recent five-year period: stationery and office supplies; confectionery; plastics materials and basic shapes; drugs, proprietaries, and sundries; men's and boys' clothing; flowers and florists' supplies; and farm supplies.

The vast majority of these businesses are small--97.6% of the enterprises employ fewer than 100 workers each. Of the 191,000 wholesalers of non-durable goods, more than 160,000, or 83.8%, employ fewer than 20 each, generate an average account premium of about $7,600, and represent one-third of the $3.7 billion market.

The vast majority of the 160,000 small wholesalers, or 69.8%, employ fewer than 10 each, develop an average account premium of just under $5,000, and represent 17.75% of the
$3.7 billion premium market. Those employing between 10 and 19 workers each develop an average account premium of $21,300 and represent 15.4% of the total market.

Another 26,000, or 13.7%, employ between 20 and 99 each, develop an average account premium of almost $51,000, and represent 36.5% of the total premium market.

The vast majority of these businesses are small--97.6% of the enterprises employ fewer than 100 workers each. Of the 191,000 wholesalers of non-durable goods, more than 160,000, or 83.8%, employ fewer than 20 each, generate an average account premium of about $7,600, and represent one-third of the
$3.7 billion market.

The vast majority of the 160,000 small wholesalers, or 69.8%, employ fewer than 10 each, develop an average account premium of just under $5,000, and represent 17.75% of the $3.7 billion premium market. Those employing between 10 and 19 workers each develop an average account premium of $21,300 and represent 15.4% of the total market.

Another 26,000, or 13.7%, employ between 20 and 99 each, develop an average account premium of almost $51,000, and represent 36.5% of the total premium market.

SICIndustry Description5-Year Employment 5-Year Premium
Growth RateGrowth Rate
5112Stationery and office supplies25.14%14.28%
5145Confectionery20.86%4.27%
5162Plastics materials & basic shapes20.60%11.60%
5120Drugs, proprietaries, and sundries18.59%6.80%
5136Men's and boys' clothing15.83%3.93%
5193Flowers & florists' supplies10.81%10.66%
5191Farm supplies10.20%1.97%
5149Groceries and related products, nec9.92%-3.68%
5142Packaged frozen foods8.66%-1.19%
5194Tobacco and tobacco products8.24%-3.26%
5148Fresh fruits and vegetables6.75%-0.83%
5182Wine and distilled beverages6.33%-5.38%
5169Chemicals & allied products, nec6.30%-1.79%
5143Dairy products, exc. dried or canned5.43%-6.43%
5139Footwear5.35%-3.49%
5137Women's and children's clothing4.92%-5.51%
5181Beer and ale3.74%-8.61%
5113Industrial & personal service paper2.02%-7.67%
5111Printing and writing paper0.78%-6.74%
5199Non-durable goods, nec-0.36%-6.29%
5192Books, periodicals, & newspapers-0.68%-9.56%
5171Petroleum bulk stations & terminals-0.81%-6.87%
519\Wholesale Admin. & Aux.-1.46%-9.53%
5144Poultry and poultry products-1.55%-7.73%
5131Piece goods & notions-2.03%-11.03%
5147Meats and meat products-2.18%-13.31%
5153Grain and field beans-2.82%-6.01%
5146Fish and sea foods-6.23%-14.08%
5172Petroleum products, nec-6.25%-12.38%
5154Livestock-7.35%-6.86%
5159Farm-product raw materials, nec-8.25%-11.44%
5141Groceries, general line-8.54%-19.88%
5198Paints, varnishes, and supplies-14.08%-20.63%

Source: ISO Market Profiler

In the Rough Notes Northeast Region, nearly 42,300 wholesalers of non-durable goods represent $994million in premium, or 3.37% of the total commercial lines market. As a group, they are more important to the region's economy than the rest of the country.

In the chart below are the 10 largest categories of non-durable goods wholesalers in the Northeast region.

Northeast Region


SICIndustry $ DWP (000)# Estabs.
5120Drugs, proprietaries, and sundries108,2281,943
5149Groceries and related products, nec100,4914,118
519\Wholesale Admin. & Aux.94,556912
5169Chemicals & allied products, nec64,2552,351
5137Women's and children's clothing58,2923,674
5199Non-durable goods, nec47,5684,315
5131Piece goods & notions41,7022,711
5172Petroleum products, nec40,670591
5141Groceries, general line40,590984
5171Petroleum bulk stations & terminals40,448847

Source: ISO Market Profiler

Together, these 10 categories account for 53% of the 42,300 non-durable goods wholesalers in the Northeast region and 64.1% of the $994 million premium market.

In line with the country as a whole, non-durable goods wholesalers employing fewer than 20 people represent 84.4% of the region's total of 42,300 wholesale establishments and account for 29.1% of the $994 million market. Of these, 30,200, or 72.4%, employ fewer than 10 workers each, develop an average account premium of approximately $5,400 and represent 16.25% of the $994 million market.

Another 5,000 wholesalers, employing between 10 and 19 each, develop an average account premium of $25,400 and account for almost 13% of the premium market. The Northeast region also supports 5,500 mid-sized wholesalers, each employing between 20 and 99, that develop an average account premium of $62,600.

Information on this and other niche markets is available from ISO by calling toll-free: (800) 888-4ISO ((800) 888-4476); e-mail: info@iso.com.

James Surrago is vice president - Data Management & Information Services of the Insurance Services Office, Inc. (ISO).